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Tata Motors Opened New Plant in Brazil to Increase Profitability

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Price movement of Tata Motors

Tata Motors Limited-ADR (TTM) rose by 2.1% to close at $34.83 per share at the end of the third week of June 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.1%, 21.8%, and 18.2%, respectively. This means that TTM is trading 7.3% above its 20-day moving average, 12.8% above its 50-day moving average, and 25.2% above its 200-day moving average.

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Related ETF and peers

The First Trust ISE Chindia Fund (FNI) invests 3.5% of its holdings in Tata Motors. The ETF tracks an index of stocks from China and India screened by market cap and weighted in tiers. The YTD price movement of FNI was -6.4% on June 17, 2016.

The market caps of Tata Motors’ competitors are as follows:

  • Toyota (TM): $174.7 billion
  • Ford (F): $53.3 billion
  • General Motors (GM): $45.5 billion

Tata Motors’ new plant

Tata Motors’ Jaguar Land Rover has opened a plant in Brazil to increase part buying from local suppliers and reduce the impact of foreign currency fluctuations on its profits. The company will produce Discovery Sport and Range Rover Evoque sport utility vehicles in this plant to sell in Brazil.

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Performance of Tata Motors in fiscal 4Q16 and fiscal 2016

Tata Motors reported fiscal 4Q16 total income from operations of 806.8 billion Indian rupees. That’s an increase of 19.0% compared to total income from operations of 677.8 billion rupees in fiscal 4Q15. Revenue from Tata and other brand vehicles and financing for the Jaguar and Land Rover automotive segments rose by 22.9% and 18.2%, respectively, in fiscal 4Q16, compared to fiscal 4Q15.

Tata Motors’ net income, EPS (earnings per share) of ordinary shares, and EPS of Class A ordinary shares rose to 52.1 billion rupees, 15.2 rupees, and 15.3 rupees, respectively, in fiscal 4Q16. This compares to 17.5 billion rupees, 5.3 rupees, and 5.4 rupees, respectively, in fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, Tata Motors reported total income from operations of 2.8 trillion rupees, a rise of 4.7% year-over-year. The company’s net income, EPS of ordinary shares, and EPS of Class A ordinary shares fell to 111.1 billion rupees, 32.6 rupees, and 32.7 rupees, respectively, in fiscal 2016. This compares to 140.6 billion rupees, 43.0 rupees, and 43.1 rupees, respectively, in fiscal 2015.

Tata Motors’ cash and bank balances and inventories rose by 2.4% and 14.1%, respectively, in fiscal 2016. Its current ratio rose to 1.04x, and its long-term debt-to-equity ratio fell to 0.95x in fiscal 2016, compared to 1.01x and 1.5x, respectively, in fiscal 2015.

Now we’ll take a look at Johnson Controls.

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